Perhaps the biggest headache as a freelancer is invoicing and getting paid for your hard work in a timely manner. Every freelancer you meet will have their own horror stories about clients that take months to fully pay an invoice, claim they are unable to pay what they agreed to, or “ghost” you after receiving the invoice. These five tips can help you get paid on time by improving your invoicing and collecting practices.
1. Require a deposit, payment in escrow or full payment in advance
For projects large and small, collecting some or all of your payment in advance can be good practice to ensure you get paid in time and ensure you are not working with a flaky client. Freelancers all have different methods, but typical practice is a 50% deposit before work begins or holding payment in escrow (meaning a third-party holds the money while work is in progress). If you have a client that for whatever reason you think may be slow to pay or may not pay at all, do not be afraid to ask for all of your payment in advance. These issues can subside over time with open and honest communication. However, when starting out, an escrow service is a great option.
2. Set yourself up as a professional from the beginning
One of the biggest mistakes freelancers make is failing to present themselves as professionals from the get go, giving clients the idea that they can take advantage of you. Small things like having a dedicated work email, website and letterhead for contracts and invoices can help with this. Also consider holding meetings at an affordable coworking space like KettleSpace instead of a coffeeshop, to show that you take your business seriously. You can also take advantage of KettleSpace when you have a video or phone call with a client and know you’ll have a quiet space to talk from with reliable WiFi. Remember that you may be dealing with an accounting department in a larger organization, so calibrate your expectations with the client up front with regards to communication and payment processes.
3. Make it easy for clients to pay you
Instead of only accepting checks, find a system like PayPal or Quickbooks that will allow clients to pay you by credit card or direct deposit. Not only will this make it easier for your clients to pay you, but you’ll also get access to online invoicing that can help you keep track of what was sent when and allow you to send automatic follow-up messages when a client hasn’t paid. Some online banking platforms have built-in billing systems that may cost an additional fee. That may be worth it to have a client pay on time.
4. Invoice promptly
Rather than waiting until the end of the month to send your invoices, consider requesting final payment as soon as work is completed. Not only will this ensure that you won’t forget to invoice, but you’ll also find that clients are more likely to pay quickly for work that they just received. If you use invoicing software, you can also set up automatic recurring invoices for clients you do repeat or monthly work for. Additionally, if you have recurring project fees that are predictable, send your invoices well in advance to allow the client plenty of time to process the payment.
5. Give a little bit
Ultimately, work between a freelancer and a client is a partnership, and your client needs to be happy as well. If you get the sense that your client may not be able to pay your full rate, sometimes offering a slightly lower price is worth it to secure work. After all, a slightly discounted payment is better than no payment at all. Above all else, a little patience can go a long way. If you’ve done a great job and feel you might be considered for additional future projects or even receive a referral, try to work with the client to reach an amicable payment plan. Then, adjust your requirements on future projects by requiring advance payment or escrow so that you don’t repeat the same mistake twice.